Backers of beverage tax blast lawsuit

BANGOR, Maine — Supporters of the state’s DirigoChoice health insurance program have raised the alarm over a lawsuit filed last week that challenges the savings offset payment, the program’s primary but unpopular current source of funding. An alternate funding formula that includes an embattled beverage tax is the subject of a statewide repeal referendum on next week’s ballot. If both the lawsuit and the repeal are successful, the advocates warned, it could spell the end of the DirigoChoice program, leaving thousands of Maine residents without health care coverage.

The lawsuit challenging the savings offset payment, or SOP, was filed by the Maine State Chamber of Commerce, and the repeal effort is being spearheaded by the group Fed Up with Taxes, whose treasurer, Dana Connors, is the Maine State Chamber of Commerce president.

“If they are successful, there will be no funding,” said Joe Ditre, executive director of Maine Consumers for Affordable Health Care, an Augusta-based nonprofit group that has worked closely with the state in developing the DirigoChoice program. “This is a direct attack on the only remaining funding source.”

Ditre spoke at a press conference in Bangor organized by the No On One Coalition, which includes a number of health care associations and consumer advocacy groups. Without a clearly identified funding stream, he said, DirigoChoice would have no choice but to cease operations, beginning as soon as April 2009. The plan provides coverage to about 11,500 members.

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Kristine Ossenfort, a government affairs specialist with the Maine State Chamber of Commerce, which filed the lawsuit in Kennebec County Superior Court on Oct. 23, denied that the organization aims to undermine DirigoChoice. But she said that both the savings offset payment, assessed against insurance companies and passed on to employers and policyholders in the form of higher monthly premiums, and the beverage tax alternative are unacceptable funding sources for the subsidies the program offers to lower-income enrollees.

“We have long advocated that it should be funded out of the General Fund,” Ossenfort said. “Let it compete with other needs in this state.”

The suit seeks to have the court invalidate the ruling in September of this year by Insurance Superintendent Mila Kofman that Dirigo health initiatives saved the state $48.7 million in health care spending in 2007. The suit also asks the court to find the Dirigo Health Agency’s interpretation of the 2003 law that created the savings offset payment “unconstitutionally vague” and “a violation of due process and an improper delegation of legislative authority.”

Speaking at the No On One press conference in Bangor, neurologist Stephanie Lash, president of the Maine Medical Association, said the subsidized DirigoChoice plan aims to provide affordable coverage for Mainers who can’t afford commercial insurance. The savings offset payment was devised to capture savings and return them to consumers, she said, but has proved unpopular with some employers and consumers because it results in slightly higher premiums. But in the long run, Lash said, providing insurance coverage to Mainers who otherwise would not have it results in lower costs for everyone.

Also speaking at the press conference, as well as at another No On One event on Portland earlier in the day, was anesthesiologist Joseph Annis, a board member of the American Medical Association who flew to Maine from his home in Austin, Texas.

The AMA recently has adopted a resolution to support taxing soft drinks, wine and beer as a means to help offset the impact of these beverages on the nation’s health care system. Such a tax makes sense in Maine, Annis said, because it both provides an alternative to the onerous savings offset payment and taxes products that contribute to high health care spending in the state.

The Maine State Chamber of Commerce lawsuit was filed against the Maine superintendent of insurance and the Dirigo Health Agency. It names as interested parties Anthem Health Plans of Maine, the Maine Automobile Dealers Association Insurance Trust, the Maine Association of Health Plans, and Consumers for Affordable Health Care.